Oil rises: As dollar falls
Oil rises as dollar falls
Oil rose above $83 today, lifted to its highest close since October 2008 as the euro's rise against the dollar offset US government data showing crude inventory rose more than expected and gasoline stocks had a surprise build.
US crude rose $1.39, or 1.69%, to settle at $83.76 per barrel.
London Brent crude for May rose $1.42 to settle at $82.40 per barrel.
The dollar fell against the euro, though the greenback hit a three-month high versus the yen. The dollar weakened against a basket of currencies but was on track for its best quarterly performance against the basket in 12 months.
Today's US Energy Information Administration oil inventory report showed crude oil stocks rose by 2.9 million barrels to 354.2 million barrels last week.
The increase topped the forecast for a rise of 2.4 million barrels, while gasoline inventories logged a modest but surprise gain.
The EIA report also showed a much bigger increase in crude stocks than the rise of 421,000 barrels reported a day earlier by industry group the American Petroleum Institute.
"On the surface you would think this is a bearish report, especially with gasoline showing an unexpected build," Mike Zarembski, senior commodities analyst at Optionsxpress in Chicago, said.
"But traders are focusing on the weakness in the US dollar today, which is keeping commodity prices in general up."
The US stock market ended lower as weak jobs and manufacturing data offset strength in the energy sector.
The US shed 23,000 private-sector jobs in March, against expectations for a rise, a report by ADP Employer Services showed today.
Business activity in the US Midwest expanded less than expected in March.
US oil demand has shown signs of recovery and China's imports have increased, giving market bulls hope for sustained growth by the world's top two oil consumers.
After the biggest annual rise in 36 years in 2009, most commodities continued to rebound on general optimism that the economy is recovering and demand will continue to improve.
Oil prices this quarter traded from that $83.95 peak in January to as low as $69.50 per barrel in February.
That sub-$15 range is more stable than the wide price swings in the previous two years. Implied volatility for US crude is now at its lowest level since prices surged to a record $147.27 per barrel on 11 July, before plummeting to $32.40 in December of that year.
But Saudi Arabian Oil Minister Ali al-Naimi today told the International Energy Forum in Cancun, Mexico, that oil market predictability was being harmed by demand uncertainty and non-transparent financial markets.
